HMOs were the health care “reform” of the days before computers, iPods or even the Walkman. They were going to make insurance cheaper, make it easier to get in to see a doctor, and costs would be kept manageable with small co-pays instead of paying bills up front and waiting to get reimbursed.

What a joke. Within a few years, HMOs became the gatekeeper of American health care. Doctors pressured to see a maximum number of patients per day for whatever the HMO was willing to pay no longer had time to play Marcus Welby. (Click on the link if you’re not old enough to remember the show.) Your “family doctor” was replaced with a “primary care physician” – HMO-speak for a general practice doctor you had to pay to see in order to get permission to see the eye doctor, ear doctor or other physician you really needed to see. And whose real job was to keep you from getting to see the more expensive specialists.

All along the way, health insurance premiums, co-pays and deductibles continued to rise, soaring to unimaginable levels. It got to the point where millions of Americans were going without health care because they couldn’t afford health insurance. It wasn’t long before the buzzword of “health care reform” came around again, beginning with the Clinton Care of the 1990s.

Two presidents later, health care reform – aka Obamacare – was signed into law in 2010. And after three years of drafting rules and regulations, the new law is set to take effect in 2014.

The only problem is that Washington – with more than a generation to reflect on the issue and the past five years or more to pass a law and write the regulations – got it wrong.

The goal in health care reform was to make coverage more accessible by making it more affordable. Health care reform was supposed to find ways to reduce the cost of medical treatment and also reduce the price of health insurance. Instead, what we got were mandates: Government mandates that all “large” employers – those with more than 50 full-time employees – provide health insurance to full-time workers. Mandates on what must be included in that insurance. Mandates on what constituted “full-time.” Mandates on what would be considered “affordable” insurance. Mandates on how quickly coverage must be offered to new workers. And, finally, mandates on how much employers will be fined if they fail to comply.

Rather than a way to help businesses provide better benefits for their workers, health care reform has instead become an attack on the business community – and retailers are directly in the crosshairs. The costs of all the mandates are so high that some small retailers are being forced to stay under the 50-employee threshold and even larger companies are being forced to cut hours of existing workers so they won’t be counted as full-time. (Under the law, employees working as little as 30 hours would be considered full-time instead of the traditional 40 hours, capturing many workers traditionally considered part-time.) Instead of helping workers, the new law is discouraging job creation.

NRF worked closely with Congress to bring about health care reform that would work, but somewhere along the way lawmakers stopped listening. We have encouraged repeal of the misnamed Affordable Care Act as recently as this month. But given the reality that “reform” is here to stay, we have also formed groups such as the Employers Health Care Clearinghouse to help retailers learn how to comply with the new law.

After going through doldrums where the Administration was slow to issue the regulations retailers and other businesses needed to prepare for the new law, HR executives are drinking from a fire hose of promulgations and announcements. News is coming almost daily on issues such as the package of “essential” benefits or the new “summary of benefits and coverage.” Even though reform doesn’t take full effect until January, businesses soon need to start tracking worker hours to determine who counts as full-time, and more requirements are coming.

NRF has kept up a steady stream of memos to member companies, conducted numerous calls and held many meetings to help retailers figure out how to make sense of all these requirements. On April 4, we will conduct our latest effort when NRF’s Neil Trautwein will host a webinar titled “Ready for the ACA? New Regs, New Challenges”.

Trautwein, by the way, is one of the utmost experts on health care policy in Washington. He has been dealing with these issues almost as long as I’ve been writing about them, and was brought on board at NRF in 2006 specifically to help retailers navigate through health care reform. He guided creation of NRF’s Vision for Health Care Reform, a plan that would have brought forth true reform to benefit employers and workers alike. Had lawmakers listened to his advice, health care reform might have worked.

As for myself, I found the ultimate end-run around HMOs, PPOs and all the other variations of the health insurance system – I married a doctor.

Ratner and I kept our presentation simple, as the most basic issues retailers need to know about this year breed endlessly complex sub-issues: How big must you be to be subject to the law? What options will be available to you? What implications does this have for your workforce, especially at the entry level? A few of the more popular topics included averaging employee hours over time to deal with variable hour employees (a.k.a. the “look-back”), the size of penalties, and the curious exclusion of the first 30 employees. Bottom line: Health reform is coming, and the retail industry can – and should – face it affirmatively.

But as new rules roll out, NRF continues to analyze the nuances of the law for our members and retailers across the country. On February 1, I presented a more in-depth survey of retail concerns. NRF’s “Ready, set … Are You Ready for the Affordable Care Act?” webinar took another dive into some of the basics, exploring ways the ACA could shape future workforce decisions. For those who missed it or need a refresher, retailers can register for on-demand playback. NRF’s ongoing health care webinar series will continue on April 4, taking a closer look at the new regulations and challenges for retailers that take effect in June.

As always, www.retailmeansjobs.com/healthcare is full of free resources for retailers to learn more about the ACA. And NRF’s Health and Employee Benefits Committee meets on a monthly basis to evaluate the latest issues. Together, the retail industry will have a full head of steam to overcome the health care reform learning curve.

Ratner is the American Dream personified. From his humble, garage-based start, he has built his business into a six-store chain that competes with and thrives against larger stores. But Ratner didn’t have to cope with the Affordable Care Act when he was starting out. In the latter years he has dealt with comparable concerns under the Massachusetts reform law. The ACA will add new complexity to the mix in the years ahead, particularly in regard to future expansion. I can tell you first-hand that the details at times can be a bit mind-numbing.

New ACA rules for coverage and penalties will begin in January 2014. Generally, a business with 50 or more full-time employees (at 30 hours per week; whereas part-time employee hours are totaled to determine the equivalent to full-time employees) must provide qualifying and affordable coverage to full-time employees or pay substantial fines. Dependents of full-time employees must also be offered coverage but the employer will not be penalized for not contributing to that coverage. Different rules will determine when the ACA mandated coverage is “affordable” or not to eligible employees. These are a few of the topics I’ll discuss with business owners in a webinar on February 1.

Entrepreneurism is the very soul and essence of Main Street. Attaching consequence – a spiked ceiling, in effect – to growth at 50 employees could chill the drive that fuels Main Street entrepreneurs like Ratner. The cycle works so that growth builds jobs which helps fuel the proliferation of further growth and jobs, and so on. Anything that threatens to stunt that growth is cause for concern.

NRF continues to work closely and cooperatively with regulators in the Obama Administration to help make it easier for retailers of all sizes to cope with the ACA’s implementation. Hopefully our session will help inoculate Ratner and his Main Street peers against some of the more severe and unintended effects of health care reform. Now that sounds much healthier, doesn’t it?

My testimony centered on retailers’ desire to receive more definitive guidance – from the administration and its agencies – in advance of the crucial transition year of 2014. Unless temporary guidance hardened into notice-and-comment finality by the first quarter of 2013, I warned, employers and retailers would be hard pressed to make the transition to the new markets in 2014.

Serious attrition from the number of employer-sponsored plans is a real and distinct possibility, and one that should not be underestimated or overlooked. In this vacuum of regulatory uncertainty and unease, employers may have to restrict, reduce or even eliminate their health care plans (a no-win situation for employers and employees alike). Workforce size – in a job-hungry economy – may also suffer as jobs become more expensive as the costs of coverage increases.

NRF’s dialogue with the administration has been positive and productive throughout and that hard work has gone a long way toward creating the flexibility necessary to navigate the complexities of the retail workforce. Still, only regulations have the force of law – and the solidity to base future judgments on. Retailers and other employers do not want to have to revisit these issues on a year-by-year basis. Fair and final regulations – taking into account retailers’ serious concerns – will offer the best chance for the ACA to succeed against all odds.

Much hard work remains and other distractions, such as the elections, fiscal cliff and the ongoing swipe fee debate, loom. But so long as the ACA remains the law of the land (yes, NRF still opposes the law), we will continue to highlights our concerns with Congress and the administration, as well as prepare our members and the broader retail industry to comply with the ACA and all its enormous complexity.

NRF encourages every employer to visit our dedicated health care resources on RetailMeansJobs.com to find out what’s coming next and what NRF is doing about it.

NRF Information

• NRF’s 4-5-4 calendar secured a spot as one of the most clicked items for the fifth consecutive month. This voluntary report guide for the industry ensures sales comparability between years by dividing the year into months based on a 4 weeks – 5 weeks – 4 weeks format.
• It seems like graduates just tossed their caps in jubilation and kids set-off for a summer of fun, but July is not too early at NRF for the annual Back-to-School survey. Conducted by BIGinsight, the research found that back-to-school and back-to-college shoppers are expected to spend a combined $83.8 billion, up from $68.8 billion in 2011. But that doesn’t mean consumers have thrown their budgets out the window, as economic concerns still play a big role in how people shop. And if you love trendspotting as much as we do, you don’t want to miss this year’s top 10 trends in our recently-released infographic.
• Speaking of trendspotting, STORES magazine released it’s annual list of Top 100 retailers. Ranked by 2011 total retail sales in the U.S., this year’s list illustrated the growth in the grocery segment. Companies such as Safeway rejoined the top ten after a five year hiatus, and H.E.B., Whole Foods Markets, Aldi, and Wegman’s also enjoyed double-digit growth last year.
• A benefit to NRF members, the quarterly Retail Sales Outlook uses recent economic data to analyze the impact of key indicators on retail sales growth. Authored by NRF Chief Economic Jack Kleinhenz, the report takes the pulse on the many facets impacting the American economy, including credit card usage, employment, the housing market, and more.
• The historic ruling by the Supreme Court to uphold the constitutionality of the Affordable Care Act had the industry buzzing for the second month in a row. Want to know how the ruling will impact your business? NRF has assembled all the resources businesses need to prepare for implementation and avoid penalization.

Top posts from Retail’s BIG Blog and Shop.org:

• Top 10 back-to-school trends for 2012
• Are you committing one of the 5 deadly sins of landing page design?
• One Kings Lane CEO: 5 current trends within the e-commerce space
• Retailers questioning $7 billion swipe fee settlement
• Consumers looking to cut corners with their 2012 back-to-school budgets

Top retail stories in NRF SmartBrief

• J.C. Penney modernizes the store-within-a-store concept
• Retailers on STORES’ Top 100 list illustrate trends
• SUPERVALU may sell all or part of company
• Best Buy debuts new connected store format
• Daffy’s to close all locations

NRF remains determined to repeal or substantially overhaul the ACA. To paraphrase Chief Justice John Roberts, elections do matter. But, just as the judicial process failed to deliver the result we wanted, we cannot afford to rely on the uncertain outcome of the November elections.  We must act now to help retailers provide affordable coverage for their employees and their families.

To help focus our grassroots and political campaign, we established a special website at www.retailmeansjobs.com/healthcare. NRF is also deeply embedded in the regulatory process on crucial retail industry issues—managing full and part-time workers (and the hardship of the 30-hour definition of full-time) with the retail industry’s uniquely variable workforce.  We started this process early—not because we like the law but rather because our members will have to live with the consequences of implementation.

The Supreme Court decision is underlined by the respect of the Judicial Branch for the Legislative and Executive Branches of government.  Still, the logic of the majority opinion stretches to reach that result.  Under the Roberts opinion for the majority, the individual mandate penalty survived under Congress’ taxation power.  Congress can encourage or discourage activities through the tax code. But, Roberts also said that the penalty was not a tax for purposes of the anti-injunction act. It is a tax that is not a tax until it really is a tax again. Quite taxing logic…..

Our biggest take away from the majority decision from Chief Justice Roberts and his colleagues is not the circular tax, but rather from some interesting dicta.  Roberts wrote:

“Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments.  Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them.  It is not our job to protect people from the consequences of their political choices.” (p. 6, emphasis added)

We must take the Chief Justice at his word.  NRF intends to work the political and regulatory process to overturn, overhaul or mitigate the damage imposed by the ACA. It is vital that regardless the outcome, we all remind policymakers that keeping the Affordable Care Act, in fact, affordable is the crucial goal.  We stand ready to assist and advise.

A new survey of Fortune 100 companies conducted by the House Ways and Means Committee found businesses could save more than $28 billion a year if they eliminated employer-based health care coverage and put their employees into the taxpayer-subsidized government “exchanges” that will be created under the law. That’s even after paying $2,000 per-employee annual penalties for not providing health care coverage.

NRF Vice President Neil Trautwein went on Fox News Channel Monday to discuss the survey and provide the retail industry’s perspective.

The $2,000 penalty comes as part of the law’s “employer mandate,” which requires most businesses to provide health care coverage to full-time workers at government-mandated levels or pay a fine. The mandate is intended to encourage more companies to provide coverage. But with the fine lower than the cost of providing insurance, it could have the unintended consequence of encouraging companies to drop coverage, Trautwein said.

“In a pure dollars and cents standpoint, it could not be more clear – you save a lot of money, hundreds of millions of dollars for some of these companies, by no longer providing coverage,” Trautwein said.

NRF has supported legislation in Congress to repeal the employer mandate, and is working with the Obama Administration to ease the impact on employers of some other provisions of the law.

During the health care debate, NRF supported efforts to make health care more affordable but argued that the proper way to do so was by making it more affordable, not through government mandates.

Today the Administration argued that if the individual mandate falls, then only the “guaranteed issue” (coverage available on demand at any time) provision falls.

Several Justices argued that it would be impossible for the Court to rummage through the law to decide what stays and what goes, therefore it all should fall. Other Justices argued that the choice should be left to Congress.

But, how exactly does the Court “remand” the case to Congress?  Wouldn’t the better choice be to invalidate the whole law (honoring the lack of a severability clause) and leave it to this or a future Congress?  NRF and other business allies have long argued that Congress should, indeed, Start Over!

The second debate concerned whether Congress exceeded its spending power by coercing state participation in vastly expanding eligibility for Medicaid to childless adults. The divide on the Court ran from the Chief Justice and his more conservative allies who find the ACA’s Medicaid expansion highly coercive to the more liberal wing of the Court who find the conditions on federal funds typical of Congress.

The nine Justices will now retreat to Chambers, cogitate with their respective collections of law clerks and then conference to determine where the majority of the Court is on particular questions. Through that process, the majority opinion will be assigned and additional opinions (concurring, dissenting, etc.) will be toted up. Chances are very good that the Justices will have a lot to say.

When they will make their decision is still highly uncertain. Traditionally cases heard in the spring often emerge in the summer, but not always. While the Court (at least in theory) is apolitical, even they are likely aware that a big election looms in the fall. The Court is not likely to delay their opinion to October, the start of their fall term.

It looks like a long, hot summer (with frequent tea-leaf reading and heedless prognostication) for health care ahead!

The Affordable Care Act’s (ACA) construct of guaranteed-issue coverage and strict rating bands require universal participation. To do otherwise would invite people to wait until they are sick to buy health care coverage. Think of someone buying fire insurance when their house is in flames.

NRF abandoned its support for the individual mandate when it became clear that it would catastrophically overburden many businesses and retailers, and hemorrhage jobs without reducing health care costs.

The beauty of our health care system – up until ACA’s passage – had been its voluntary nature.

Employers want to attract and retain top talent and often voluntarily offer health care coverage as part of the employee’s compensation. Employers who can’t offer coverage today are not “freeloaders” but are rather priced out of the market. The ACA’s mandates turned this system on its head in favor of interlocking obligations and tax penalties.

The question before the Court today was whether Congress could compel all individuals to purchase health coverage or to obtain subsidized coverage.

A majority – five Justices – appeared to signal “no.” (Follow this link to the audio for today’s arguments and this link for the transcript.)

While it is really hard to take a definitive view based on oral arguments alone, the questions the Justices’ posed to the lawyers are fairly suggestive of the direction the Court is leaning. If that is the case, today was not a very good day for Obamacare.

Nevertheless, NRF would not encourage anyone to write the ACA’s obituary – at least not yet. Nor should retailers, restaurants, states or others stop their efforts to smooth future compliance with the law. It is still not clear whether all, some or none of the law will fall but ACA implementation is still chugging down the track. No prudent business should ignore the possibility that ACA will go forward as planned.

Tomorrow’s oral arguments before the Court – the third in three days – will focus on the issue of severability (whether various components of the law can be severed away from the law’s whole) and whether Congress can compel states to expand Medicaid eligibility.

The question before the Justices today was whether the 19^th Century Anti-Injunction Act (AIA) barred consideration of the case by the lower courts (hence, also the Supreme Court) before the “tax” penalty for failure to comply with the individual mandate (individuals must purchase coverage or pay a penalty as of 2014) is levied.

The Court seemed to be quite skeptical of this argument. Click on this link to listen to the arguments or click here to read the transcript.

This threshold issue of standing was actually raised by the Court itself, using hired counsel (Robert Long, Covington & Burling) to make the argument. Both the federal government (supporting ACA) and opponents of the law opposed the AIA challenge.  U.S. Solicitor General Donald Verrilli argued that the penalty is not a tax, hence the AIA doesn’t apply.  Gregory G. Katsas of Jones Day argued that the penalty is different than the type of revenue-oriented tax envisioned under the AIA.

The Court will meet again tomorrow to hear the cornerstone arguments on the constitutionality of the individual mandate.

Wednesday the Court will hear two arguments re: the Medicaid expansion and severability.

Formal decisions on the ACA cases before the Court are not expected until June or later.

Nevertheless, the outcome of today’s argument appears pretty evident: the Court will not use the AIA to side-step this judicial – and, yes, political, hot potato.

Stay tuned for more…